Former Employee Requests Diwali Bonus: Should We Honor It After Full Settlement?

One of our permanent employees left the organization in Nov 2018. The company has declared a 1/2-month CTC as a bonus for Diwali 2019. Now, this employee who left the company is asking for the bonus. Should we pay him the bonus or not because he left the company in Nov 2018 itself? We have paid him his dues in full and final settlement, including Gratuity and Leave encashment. Please advise.

The statutory bonus at 8.33% of the salary earned for the period from 1st April 2018 until leaving the company should be paid as a bonus to the employee who left the service, provided that during this period he has worked for 30 days.

As per the Bonus Act of 1965, employees who have completed 30 days in a year are eligible for a bonus. To my knowledge, the bonus amount does not appear in the full and final settlement.

As rightly discussed above, if a person worked for a minimum period of 30 days in any financial year, he will automatically be paid a bonus as may be decided by the company, subject to loss of pay deductions if any. It does not matter whether the person is continuing or has left the organization; if one is eligible as per the Bonus Act, he has to be paid.

Left employee is also eligible to receive a bonus, and he needs to be paid.